Current Portfolio:


CALL Play Updates

Cameron International - CAM - close 38.51 change +0.57 stop 35.45

Target(s): 40.50, 42.00, 43.95
Key Support/Resistance Areas: 45.00, 42.50, 41.00, 38.75, 36.00
Current Gain/Loss: +21%
Time Frame: Several weeks
New Positions: Yes, on weakness

Comments:
8/16: CAM gapped lower and the stock was bought the remainder of the day. September $40 were going for 95 cents at the open and they have gained +21%. CAM closed right on its 20-day and 100-day SMA's so we may get a pause or pullback at current levels. Any weakness would give readers who haven't entered positions a 2nd chance. If the broader market bounces from CAM should easily break through the moving averages and trade up towards our targets.

8/14: CAM was caught in the middle of the drama of the Gulf of Mexico oil spill. The stock has been beaten down because they built the blow out preventer (BOP) on the Horizon well. However, the BOP was heavily modified by RIG/BP so they don't really have any exposure to the damages. CAM is world's largest seller and manufacturer of BOP's so any new rules from the government means a lot of new business for Cameron. And the company recently reported over a $1 billion in new orders. I suggest we capitalize on the gaining momentum and initiate long positions now. Our stop $35.45 which is below Thursday's low, and the 50-day SMA. At a minimum I'm looking for CAM to retest its recent swing high and possibly charge up to its 52-week highs if the broader market cooperates.

Current Position: Long September $40.00 CALL, entry was $0.95

Entry on August 16, 2010
Earnings Date 11/3/2010 (unconfirmed)
Average Daily Volume: 4.6 million
Listed on August 14, 2010


FMC Technologies, Inc - FTI - close 62.82 change +0.85 stop 58.25

Target(s): 65.25, 67.00
Key Support/Resistance Areas: 69.00, 65.50, 62.40, 59.00
Current Gain/Loss: +13.6%
Time Frame: Several weeks
New Positions: Yes, on weakness

Comments:
8/16: FTI also gapped lowered and was bought remainder of the day. The stock closed right on its 20-day SMA so we could get a pause or pullback. Any weakness will readers a second chance to enter positions. I am looking for a move up towards FTI's recent swing highs which is just above our first target of $65.25.

8/14: This is another play on the Gulf oil spill as FTI stands to benefit from new regulations in underwater robotics. The company reported solid earnings results in July and this past week's dip is a buying opportunity. The stock is maintaining an upward trend line while the broader market has not, which is a sign of overall relative strength. I believe FTI should easily retest its recent swing high which is just above our first target of $65.25. Our more aggressive target is $67.00 but if the broader market is strong FTI could even make a run at its YTD highs. Our stop is $58.25 which is below the upward trend line and the 200-day and 50-day SMA's. I see some potential in this trade and am going to push the suggested option out to October, but that doesn't mean we can't take quick profits should FTI break higher soon.

Current Position: Long October $70.00 CALL, entry was at $1.10

Entry on August 16, 2010
Earnings 10/27/2010 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on August 14, 2010


Human Genome Sciences - HGSI - close 25.88 change -0.14 stop 24.65

Target(s): 27.20, 28.20, 29.20
Key Support/Resistance Areas: 29.80, 28.24, 27.80, 26.80, 25.00
Current Gain/Loss: -11%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/16: HGSI broke down from its 20-day SMA but when the stock hit its 50-day SMA it bounced hard. The stock looks poised to bounce higher and should make a run at our first target if there is strength in the broader market. 8/14: We are long HGSI calls at 90 cents. The stock traded within yesterday's range so there not much to report. HGSI remains in its upward channel and above its 20 and 50-day SMA's. I'm looking for HGSI to bounce back up towards its 200-day SMA. My comments from below remain the same.

8/12: We're back for another long play in HGSI which produced a winner for us a few weeks ago. The biotech sector has been a relative strong performer recently as it has maintained its upward trend line from the 7/1 lows while the broader market has not. I like HGSI and I suggest we initiate long positions now. The stock is trading in an upward channel and bounced nicely today at the bottom of the channel. HGSI is above its 20-day and 50-day SMA's and looks poised to make another higher high. I'm looking to make $1.50 to $3.00 on this trade. We'll use a stop at $24.65 which is below the 50-day SMA.

Current Position: Long September $28.00 CALL, entry was at $0.90

Entry on August 13, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 2.9 million
Listed on August 12, 2010


SPDR Gold Trust - GLD - close 119.73 change +0.99 stop 115.95 *NEW*

Target(s): 121.60, 123.00, 125.00
Key Support/Resistance Areas: 123.00, 119.10, 116.50, 113.50
Current Gain/Loss: +22.2%
Time Frame: Several weeks
New Positions: Yes, on weakness

Comments:
8/16: GLD is hanging tough and gained +1% today. The ETF broke above $119.15 which was a resistance point and I believe GLD should make a run higher from here. Our positions have gained +22% and I suggest readers begin to tighten stops or take profits as our targets approach. I've tightened our stop to $115.90 which is below the 20 and 100 day SMA's and GLD's recent upward trend line.

8/14: GLD is consolidating in a tight range above its 50-day SMA. We need a break above $119.15 which should spark more buying. If readers are not in positions a break above this level could be used as a more conservative approach. There is a swing high of $119.54 from December that may also act as resistance but I think the aforementioned level is more important. I also like GLD on any weakness.

8/12: GLD gained +1.43% today. Unfortunately for us, the gains came overnight so we did not get filled at a better price. Nonetheless, gold is gaining momentum and if it trades above $119.15, which is near the July highs, GLD should be on the fast path to retest its YTD highs and possibly print new highs. We may see a pullback to close the gap higher today, and if it does it will present another opportunity to get in if readers aren't already in.

Current Position: Long September $120.00 CALL, entry was at $1.80

Entry on August 12, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 12.4 million
Listed on August 10, 2010


PUT Play Updates

Apple, Inc - AAPL - close 247.64 change -1.46 stop 267.50

Target(s): 240.00, 233.00, 226.00
Key Support/Resistance Areas: 21.50, 20.50, 19.80, 19.00, 18.50
Time Frame: Several weeks

Comments:
8/16: AAPL closed -0.60% lower while the broader market was relatively flat. Our triggers to enter short positions were not hit. I want remove the trigger to enter short positions on weakness at $245.95 because I do not want to get caught in a short lived dip. The market looks ready to bounce and AAPL should also bounce. If it does I like short positions in AAPL at $255 which is just below the 20 and 50-day SMA's and its recent down trend line. I am also going to suggest we change the strike to the September $240 put which should go for $3.20 at our higher trigger. My comments from below remain the same.

8/14: AAPL has been in a fuzzy cloud recently and I believe it looks vulnerable at these levels. Recent reports on smart phone market share point to the Android capturing 18% market share compared to Apple's 14%. Technically, AAPL had a daily and weekly close below its long term upward trend from its March 2009 lows for the first time this past week. I believe AAPL should test its 200-day SMA which is below our two most conservative targets. I also think this is a good hedge against some of our long positions in the model portfolio. I suggest we initiate short positions in AAPL on strength if it trades to $255 or on weakness at $245.95. This is a position that I suggest being quick to tighten stops and/or take profits.

An alternative strategy readers may consider on a short AAPL position is to buy a PUT spread. For example, buy the September $230 PUTS (current ask $3.10) and sell the September $210 PUTS (current ask $1.03) to finance the cost. This is a well defined risk strategy where your max loss is $214 (the amount you paid for the spread) and your max gain is $1,786 if AAPL closes at $210 at expiration.

Suggested Position: Buy September $240.00 PUT, current ask $5.55, estimated ask at entry $3.20

Entry on August xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 23 million
Listed on August 14, 2010


Occidental Petrol. - OXY - close: 75.90 change: +0.51 stop: 81.05

Target(s): 74.00, 71.50, 67.50
Key Support/Resistance Areas: 75-74.00, 70.00, 65.00
Current Gain/Loss: N/A
Time Frame: Several Weeks
New Positions: Yes, trigger at $77.50

Comments:
8/16: Its a good thing we removed our lower trigger to enter positions as OXY hit $73.90 and bounced over $2 into the close. I'm looking for the stock to bounce a little more and suggest we initiate short positions at $77.50. We've chosen a further out of the money option than normal to limit risk.

8/14: Hope is not a good strategy when you are in a position, but I suppose it's OK if you're not in yet. I sure hope OXY bounces to $77.50 so our trigger to enter short positions is reached. All we want is a bounce in the stock so we can exploit it. There is so much overhead congestion, moving averages, trend lines, etc. to keep this stock in check. I want to remove the lower trigger to enter for now. If OXY breaks down prior to bouncing the stock could reverse on us so I don't want to get trapped. I like the short set up on strength and suggest looking for a quick move down to the adjusted targets above. I will also add that OXY could bounce higher than $77.50. It really just depends on the strength in the oil sector and how far the broader market can bounce. A bounce much over $79.00 doesn't seem likely.

8/12: OXY came within 25 cents of our trigger to enter short positions. I think this is a good entry and there is a lot of overhead resistance to keep any additional strength in check. My comments from below remain the same.

Suggested Position: Buy September $70.00 PUT, current ask $1.03, estimated ask at entry $0.75

Entry on August XX
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume 4.4 million
Listed on August 7th, 2010


Procter & Gamble - PG - close: 59.77 change: -0.05 stop: 63.26

Target(s): 59.50 (hit), 59.20, 58.05, 57.25
Key Support/Resistance Areas: 59.00, 61.00
Current Gain/Loss: +44%
Time Frame: 2 to 3 weeks
New Positions: Yes, on strength

Comments:
8/16: I want to raise our second target to $59.20 to take profits in PG. Our target of $59.50 was hit in early trading today and this position could have been closed for a +70% gain in early trading. don't want this to turn into a loser and suggest readers begin looking for a exit. The broader market looks like it wants to bounce and the time value of our PG options could begin suffer as time is not on our side. $59.50 is still a valid target and where stops should be tightened to protect profits if PG shows any weakness in the coming days.

8/14: Rallies in PG keep getting sold into. We have a nice gain in this position and it could turn into a big winner if PG breaks below $59.00 which is below our 2nd target. I'm inclined to hang on to this position to see if the selling begins, however, that probably means enduring a bounce this week. PG is also a defensive play so the decline in the stock may take a while. If we get down to $59.05 I suggest tightening stops too see if we can get more out of the trade. If we do get to this level we should have close to a +100% gain. That's hard to beat.

8/12: This morning PG came within 8 cents of reaching our 1st target before reversing with the market. Positions could have exited for a +60%. So I've raised that target 20 cents to $59.50 should PG retest this area. The PG chart looks good to the short side but there is support near $59.00. Tomorrow we get CPI and retail sales data and this could spark selling if the reports are bad. If PG gets down to $59.50 again it may break through this support. There is more support $59.00 which are the January and July lows. PG bounced hard at these levels so I've added $59.05 as a target as well. I would be inclined to take profits or at least tighten stops as PG approaches these levels. We now have a +44% gain so protect profits if the weakness continues.

Current Position: Long September $57.50 PUT, entry was at $0.36

Annotated Chart:
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Entry on August 10, 2010
Earnings Date 10/28/10 (unconfirmed)
Average Daily Volume 2.5 million
Listed on August 7th, 2010


CLOSED BULLISH PLAYS

Volatility Index - VIX - close: 26.10 change: -0.14 stop: 19.60

Target(s): 25.95 (hit), 27.20 (hit), 28.00 (hit), 31.50, 35.00
Key Support/Resistance Areas: 20.00, 22.00, 24.00, 26.00, 28.00
Final Gain/Loss: +25.4%
Time Frame: 1 week
New Positions: Closed

Comments:
8/16: VIX gapped higher and quickly surged to our 3rd target of $28.00. In the weekend play updates below I mentioned that a quick move lower in the market this week could be a reversal point and to either exit positions or tighten stops if that happened. As such we are flat the position for +25% gain. Frankly, I'm surprised the price of our calls weren't higher but sticking with the exit plan was the right thing to do and we booked gains.

8/14: VIX closed near its highs of the day and we currently have a +25% gain in this position. Exiting this trade could become somewhat tricky depending on what happens next week. I suspect we may get a bounce in the broader market next week so we may need to exhibit some patience with this trade. However, if we head lower first I believe the chances of a hard reversal becomes higher. So if that happens I suggest tightening stops as the VIX heads higher and as our targets approach. $27.20 and $28.00 are likely exit points on a quick down move prior to a bounce.

8/12: The VIX came within 9 cents of hitting our second target so I am going to lower the target to $27.20. If we get further weakness in the S&P 500 prior to a bounce the VIX may spike up to our targets and then retreat like it did today. Therefore, taking profits or tightening stops if that happens is the smart play. If the market finds its legs and bounces from here we will need to exhibit some patience with the trade.

NOTE: September VIX options expire on Wednesday, Sept. 15th, not Friday

Closed Position: Long VIX September $30.00 CALL at , entry was at $2.95

Annotated Chart:

Entry on August 11, 2010
Earnings Date N/A
Average Daily Volume N/A
Listed on August 7, 2010


CLOSED BEARISH PLAYS

Leggett & Platt - LEG - close 19.68 change -0.00 stop 21.75

Target(s): 19.85(hit), 19.40 (hit), 18.70 18.40
Key Support/Resistance Areas: 21.50, 20.50, 19.80, 19.00, 18.50
Final Gain/Loss: +73.3%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
8/16: Per the weekend updates LEG quickly sold off to $19.40 prior to bouncing so we booked profits for a +73% gain. The broader market looks poised to bounce so if readers still have positions please protect profits. Any bounces in LEG up towards its downtrend line ($21.00 area) and moving averages ($20.50 area) from below may present another shorting opportunity.

8/14: LEG closed below the $19.80 support level I mentioned in Thursday's updates and our gain is now +46%. If there is weakness in the broader market early this week our $19.40 target could be hit fast, and it should give us a +65% gain so I suggest either taking profits or tightening stops to protect gains if we get there. I've added a more aggressive target of $18.40 for readers interested in riding this down farther but I doubt we get there before a some sort of bounce. You can always get back in later.

8/12: LEG hit our first target today and we now have a +33% gain in the position. The stock is finding support at the 7/19 and 7/20 lows which were just below $19.80. This is why my first target was $19.85. If it breaks here it should be a vacuum down to the $19.40 area which is our second target (raised 5 cents). This target should give us a +65% gain so I suggest either taking profits or tightening stops to protect gains if we get there.

Closed Position: Long September $20.00 PUT at $1.30, entry was at $0.75

Annotated Chart:

Entry on August 11, 2010
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 1.45 million
Listed on August 10, 2010